China’s new economic zone higher the country’s economic growth

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China on Saturday approved a new special economic zone, described as “a thousand year project”, in the heavily polluted province of Hebei, to focus on building clusters of high-tech and innovative businesses and take over some “non-capital functions” from Beijing. ($1 = 6.8886 Chinese yuan renminbi) SHANGHAI: Chinese stocks rose on Wednesday led by the Shanghai benchmark posting its best day in eight months, as investors cheered Beijing’s decision to launch a new economic zone in Hebei province, sending shares of several related firms surging by the daily limit of 10 per centThe blue-chip CSI300 index rose 1.4 per cent to 3,503.89 points, while the Shanghai Composite Index gained 1.5 per cent to 3,270.31 points. “The way they put it leaves lots of room for imagination, in terms of future investment,” said Tian Weidong, an analyst at Kaiyuan Securities.Tian identified several sectors aside from property that would benefit from the plan, including environmental and infrastructure stocks. “This time the momentum is more sustainable because it’s boosted not simply by the housing market , which holds lots of uncertainty at the moment,” Tian said.An index tracking major developers added 1.6 per cent, despite Beijing’s ban on property sales to contain speculators after a sudden housing boom in the new economic zone.Concerns over a liquidity squeeze eased somewhat, as the nation’s central bank said it would rely on a range of monetary policy tools to keep liquidity at a stable level.The central bank injected 618.99 billion yuan ($89.86 billion) into the financial system via short- and medium-term liquidity tools in March, up nearly 50 per cent from the previous month.Sectors rallied across the board, led by infrastructure and material stocks, seen benefiting greatly from the development of the new zone.Shares of more than 30 companies related to the new economic zone shot up by the maximum allowed 10 per cent, including developer BBMG Corp, cement maker Jidong Cement and harbour operator Tianjin Port.

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Tian identified several sectors aside from property that would benefit from the economic zone including environmental protection and infrastructure stocks . Real estate developers added 1.7 percent, despite Beijing’s ban on property sales to contain speculators after a sudden housing boom in the new economic zone. The Hong Kong China Enterprises Index lost 0.3 percent to 10,287.92 points. Most sectors made modest gains by the lunch break, with services stocks leading the gains. China approved a new special economic zone, described as “a thousand year project”, on Saturday in the heavily polluted province of Hebei, to focus on building clusters of high-tech and innovative businesses and take over some “non-capital functions” from Beijing.

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These Chinese stocks are set to pop after new special economic zone announced

Over the long term, the auto sector could flourish if the government lured such firms to the special economic zone, Cheung said. “Whether the special economic zone will compete with Shanghai or Shenzhen — I think it really depends on the policies,” Cheung said. Cheung also said he expects property prices in the Xiongan area, and as far away as Beijing, to climb as the new special economic zone gets under way. That’s because China will need to support an influx of business and workers in the zone, dubbed Xiongan New Area, if the government wants to succeed. But this region has been hit by massive layoffs as the country’s economic growth engine lumbers toward the services sectors.